On Monday of this week Coffs Coast Outlook was alerted to the fact that tonight’s Council agenda features the draft accounts for the CHCC for the 2019-20 financial year.
By The Editor and Rob Steurmann
And in those accounts it is proudly announced that a net operating ‘profit’ of $21.55m has been made. Sounds great doesn’t it?
But then underneath that grandiose statement is this little ‘rider’;
‘Net operating results for the year before grants and contributions provided for capital purposes ($16.457m)’.
Those closed brackets dear reader signify an underlying operational loss for the 2019-20 financial year.
So is the operational result (profit) announced a ‘Clayton’s profit’? ‘The profit you have when you don’t have a profit’?
We are inclined to answer yes to that question.
And it would appear Councillor Sally Townley agrees with us.
Dr Townley is quoted today by the Coffs Coast Advocate as saying; “The final position appears considerably worse than expected. While some loss can be attributed to COVID, the final position is also offset by some very large and in some cases unexpected grants.”
The so called operating ‘profit’ is fluffed up over the last quarter of the financial year by grants that flowed in, often un-requested, as a result of State and Federal Government largesse largely due to Covid 19 and the Bushfire Crisis.
There was a $500,00 grant from the State Government for library purposes but contrary to Council’s media spin that was not due to the CCS in Gordon Street or any other similar reason. Pretty much all regional NSW Councils got that grant!
Oh yeah and there was some money from an airport screening fund too, although not a monumental amount
No, the profit announced is not due to managerial wizardry and foresight. It has nothing to do with that.
Without those grants the net operating position would have been a loss of $16.45m.
Sure Covid 19 would have a bit to do with that. But also hidden away in the 108 pages of accounts our Councillors are expected to wade through for tonight’s meeting is a line item which states ‘loss on sale of asset(s) of $15,334m.
We hear you ask; “Huh? What assets, when were they sold, why at such a loss?”
Well apparently according to the fine print they were; “significant one-off adjustments recognised through the revaluation of transport and stormwater drainage infrastructure assets and demolition of some property assets.”
And all adding up to $15.334 million in net losses.
So what is the long story in short? The real operating situation, minus one off special grants, is a net loss of $16.45m.
That is a gap of $38m between the anounced ‘profit’ and the net underlying loss of 16.45m
Council’s executive really does need to be grilled by all eight Councillors tonight over this. Not just Cr Townley.
And then there is the airport
On the airport Councillors are being asked to choose from a range of options ranging from maintaing the status quo, appointing an airport management group, deferring any lease decision for approximately five years through to leasing the airport for 99 years, the latter effectively being privatisation (although land ownership would be maintained by Council).
The key thing to remember is that the Council Executive have made no recommendation to Councillors tonight.
Could it be that in this extremely depressed aviation market there was only one bidder, or none even, to lease the airport long term? Could it be that any bid(s) were a lot lower than what was anticipated or wanted?
If that supposition is correct then Councillors need to consider deferring the lease process at the very least. Certainly not leasing it for what for many of us would be an eternity.
It is important to remember that the airport makes a profit of $3.5 – $4m a year in good years.
Leasing it for 99 years now, given what may well be a low response rate to the leasing tender is akin to a ‘fire sale.’